Monday, April 26, 2004

Kill Google, Vol. 1

It was easy to speculate on how to kill eBay since I have no love for that company. But I do love Google. This blog has been a Google Love Fest ([1][2][3][4][5][6][7]). But even that which we love must die eventually. So the time has come to ask, what could kill Google?

Despite claims that Google is a monopoly, in fact it has less than 40% of the search market, nearly tied with MSN and Yahoo. While there is some evidence that customers are loyal to search engines, switching costs in this business are trivially low. To maintain or grow market share, Google's product needs to be superior to the other offerings in the marketplace. Google needs to innovate, creating a moving target for Yahoo and MSN and keeping ahead of the thehordesofstartups nipping at Google's heels. Unlike Google, MSN and Yahoo do not have to innovate to win. They can simply duplicate Google's current product, then use their considerable marketing power to pull customers away from Google. If Google slows down, Microsoft will turn them into another Netscape.

The first threat to Google is internal. Google needs to maintain a culture that produces and delivers innovative new products. So far, Google has done this by hiring some of the brightest and most creative researchers in the world. But, as Google grows, having incredible people isn't enough. Communication becomes difficult in a large organization. Accountability drops, free riding increases. Great prototypes are developed, but never get out the door. People don't know who to contact and how to get things done. Google is well known for having nearly no management -- the controlled chaos of a research lab -- but, unless Google can adjust its organizational structure to its new size, the firm may find its innovation crushed under its own growth.

The second threat to Google is external. Google thrives on innovation, but another's innovation may out-Google Google. Clustering search engines such as Vivisimo may be one threat, but the technique hasn't proved extremely compelling yet. Many are working on question answering systems (e.g. Start from MIT), but Google, with some of the world experts in natural language processing, is well prepared to compete here. Personalization may be one area where Google has been slow to compete. Google Labs has a prototype of personalized search, but it's been widely criticized as ineffective, most likely because of the technique used. A9 is rumored to be developing personalized search. Yahoo's CEO has said that they intend to focus their innovation on personalization. And, while Microsoft has no offering in personalized search, it is taking some steps toward personalized news.

I love Google and would hate to see it fall. But change comes rapidly in internet technology. AltaVista also seemed invincible at its height, as did those before it, yet these companies faded as new techniques eclipsed the old. Google is not invincible. It too can die.